Reasons not to worry that the "double top" model of Bitcoin in 2021 will repeat in 2025

After surpassing the $111,000 threshold, the price of Bitcoin has shown signs of slowing down over the past two weeks. Against this backdrop, some investors began to worry about the possibility of a "double-top" scenario, a technical pattern that often signals a sharp reversal of the market. This is what happened in 2021, when the Bitcoin price after peaking quickly fell into a sharp decline. Veteran analysts, however, argue that these concerns are somewhat unfounded, and they believe that current market conditions are completely different from four years ago.

Double Top Model

The "double top" pattern often appears when an asset reaches a high price, then falls, and subsequently returns to a similar high price but cannot surpass this level, leading to a strong bearish trend. Analysts believe that if Bitcoin continues to experience divergence in the coming period, a strong correction like in 2021 may occur. Some recent technical charts showing divergence, particularly on the RSI indicator, have raised concerns about the reoccurrence of the double top pattern.

However, according to the famous analyst Stockmoney Lizards, these divergence signals are unreliable and can be misleading. He argues that over the years, the RSI indicator has failed to accurately predict market peaks. Specifically, Stockmoney Lizards refers to instances in 2015, 2017, and 2019, where divergence signals appeared but were not followed by significant corrections. The probability of this indicator, according to him, is only 1 in 5 correct, indicating that one should not be overly concerned about the current divergence signals.

Why the "double top" model of 2021 is hard to replicate in 2025?

One of the reasons why analysts such as Stockmoney Lizards are not too worried about the "double-top" scenario in 2025 is the fundamental difference in the current market context and conditions compared to 2021. In 2021, the Bitcoin market faced a series of negative factors, such as the collapse of the Luna project, the bankruptcy of FTX, and the sharp increase in interest rates by the US Federal Reserve (Fed) fight inflation. These factors create an unstable environment and cause a sharp decline in the value of Bitcoin after peaking.

"Do you want to know what I discovered? This indicator is almost always wrong. 2015: 'Divergence means peak!' – But BTC increased 10 times. 2017: 'Divergence this time is different!' – And BTC continued to rise sharply for months. 2019: 'Finally confirmed!' – Another 4x jump is coming. The only time it was actually accurate was in 2021. That is, only 1 out of 5 times. So should we really sell out just because an indicator has failed 80% of the time?" said Stockmoney Lizards.

However, Thomas Fahrer, the founder of ApolloSats, thinks that the current situation is completely different. The Bitcoin market in 2025 is being strongly supported by a number of notable positive factors. One of the key moves was the introduction of Bitcoin ETFs, which made Bitcoin a more accessible asset for institutional investors. Not only that, large corporations around the globe have started buying Bitcoin as reserves, with amounts amounting to billions of dollars. Several U.S. states have also begun building Bitcoin treasuries, demonstrating a shift in digital asset awareness.

These factors not only help reduce the speculative nature of Bitcoin but also strengthen its development as a reliable asset in the eyes of institutions, unlike in 2021, when Bitcoin was primarily viewed as a speculative tool.

Positive technical and on-chain indicators

In addition to analyses of fundamental factors, analysts also point out some noteworthy technical indicators and on-chain data. One of them is the MVRV Z-Score, which is an on-chain indicator that helps assess the valuation of Bitcoin compared to its fair value. Currently, the MVRV Z-Score is at a low level, indicating that Bitcoin is not overvalued and still has room for further growth.

Moreover, the number of active Bitcoin wallet addresses has also increased significantly in recent times. This indicates strong participation from both individual and institutional investors. This is a positive signal, reflecting the growing interest in Bitcoin, despite concerns about the possibility of a bearish trend.

Market 2025: A Different Story

According to Stockmoney Lizards, although the current Bitcoin price chart may have similarities to the pattern of 2021, the market dynamics in 2025 are completely different. Institutional investors are currently playing a crucial role in shaping the value of Bitcoin, and strong support from large investment funds helps to reduce the risk of severe fluctuations similar to what occurred in 2021.

The current crypto market is no longer entirely dependent on speculative factors as it was before, but instead sees the participation of major financial institutions, governments, and ETF funds. These changes have created a stronger market structure that is less likely to experience sharp fluctuations in the "double top" manner seen in the past.

Although the "double top" pattern of 2021 remains a focal point for many investors and technical analysts, the Bitcoin market in 2025 has shown a clear difference in fundamental factors. The strong participation of institutions, the development of new financial products such as Bitcoin ETFs, along with positive technical indicators, all suggest that Bitcoin is likely to continue its growth rather than repeat the strong bearish pattern seen in 2021. The market is witnessing an important transformation, and if this continues, Bitcoin may reach new heights in the near future.

Annie